-LRB- CNN -RRB- -- Ahead of upcoming nuclear talks , Iranian President Mahmoud Ahmadinejad downplayed the threat Israel poses to Iran , comparing it to an annoying bug .

`` Israel is nothing more than a mosquito which can not see the broad horizon of the Iranian nation , '' he said Saturday in northeastern Iran 's Khorassan province , according to the semi-official Fars news agency .

Ahmadinejad said `` regional states '' were being duped into buying billions in arms from `` arrogant and imperial powers , '' driven in part by all the talk surrounding a potential war involving Iran and Israel , the state-run Islamic Republic News Agency reported . Such military purchases , he said , are unnecessary because there is no war on the horizon between those two nations .

The Iranian president alluded to `` rulers '' who sold `` their petrol '' for $ 60 billion worth in arms , though he did not mention by name either the purchasing or selling country . Saudi Arabia is in the midst of a 20-year , $ 60 billion arms deal with the United States , including nearly $ 30 billion for F-15 fighter jets announced late last year .

Ahmadinejad has long questioned the existence of the Holocaust and , months after taking office in October 2005 , he participated in a lengthy protest called `` World Without Zionism '' and has repeatedly derided Israel .

`` With the force of God behind it , we shall soon experience a world without the United States and Zionism , '' he said then , according to another IRNA report .

On Saturday , while seemingly backing away from the potential for an armed conflict , Ahmadinejad hardly signaled that Iranians should or will embrace Israel .

He predicted Israel could fall if regional powers cut ties -- particularly by refusing to sell oil to Israelis .

Tensions have ramped up in recent years over Iran 's controversial nuclear program . Iran claims it is being developed for peaceful means , while Western powers and Israel say they think Iran is evading international inspections and intent on developing nuclear weapons .

This sentiment has led to sweeping sanctions targeting Iran 's economy , government and its leaders .

Israeli Prime Minister Benjamin Netanyahu has been a particularly harsh , persistent critic of Iran 's leadership and nuclear program , with rumors circulating for months that Israel may pre-emptively strike nuclear sites in Iran and possibly set off a regional war .

And Iran 's supreme leader , Ayatollah Ali Khamenei , last Friday `` blasted the U.S. war-mongering rhetoric against Iran , '' including President Barack Obama 's assertion that `` all options are on the table . '' He added war `` can be 10 times more harmful to '' the United States than Iran , according to a Fars report .

Even with all the back-and-forth , there has been an apparent shift recently in the tone , and manner , of dialogue between the two sides .

EU foreign policy chief Catherine Ashton described nuclear talks last month in Istanbul , Turkey , between international and Iranian diplomats on nuclear matters as `` constructive and useful . ''

And Iranian Foreign Minister Ali Akbar Salehi said last week that he was optimistic that there would be progress in continued talks with the United States , Russia , China , Germany , France and Britain -- the so-called P5 +1 , Fars reported .

Those parties are set to meet again May 23 in Baghdad .

Before then , discussions in Vienna , Austria , will be held on Monday and Tuesday to address `` outstanding issues and remove ambiguities , '' Iran 's envoy to the International Atomic Energy Agency Ali-Asghar Soltanieh said , according to Fars .

CNN 's Azadeh Ansari contributed to this report .

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NEW : Ahmadinejad says `` regional states '' have little need to purchase arms

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Iran 's president calls Israel a mosquito , downplaying the prospect of war

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Talks on Iran 's nuclear program are set for next week in Austria , ahead of P5 +1 talks

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Iran 's foreign minister recently said he 's optimistic there will be progress